$1M Per Employee Standard

A discussion about operational efficiency and employee count benchmarking, specifically focusing on the $1M revenue per employee standard used by companies like Goldman Sachs.

Key Revenue Per Employee Examples

• Native (deodorant company)

  • $50M run rate with 8 employees
  • Later grew to $100M+ with only 30 employees
  • Significantly exceeded $1M per employee benchmark

• Brumate (drinkware company)

  • $30M revenue with just 1 employee (the founder)
  • Used outsourced agencies for support functions
  • Extremely efficient operation model

Common Mistakes in Hiring

• Overhiring relative to revenue
  • Companies with 20 people doing $2-4M in revenue
  • Should target much higher revenue per employee ratio
  • Too many people in office instead of focusing on revenue-generating activities

Operational Efficiency Guidelines

• Keep headcount lean

  • Start with minimal full-time employees
  • Use outsourced agencies for flexible scaling
  • Only hire when absolutely necessary

• Focus on revenue first

  • Generate significant revenue before expanding team
  • Maintain high revenue per employee ratio
  • Avoid unnecessary overhead costs

Benefits of Lean Operations

• Greater flexibility

  • Ability to scale up/down with agencies
  • Lower fixed costs
  • Faster decision making

• Better financial health

  • Higher profit margins
  • More efficient use of resources
  • Sustainable growth model